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Office 365 Earns High Marks in Education, Struggles in Enterprise

28.08.2012
Office 365 celebrated its first birthday in July, and the cloud service has attracted an impressive list of educational customers over the last year. But when it comes to gaining traction in the enterprise, the picture is far less encouraging for Microsoft.

That's not to say that Office 365 has been a failure--far from it: Microsoft recently introduced its Office 365 service to 46 new markets, and it has been adopted by high-profile conpanies including Burger King, Japan Airlines, Hallmark Cards and Origin Energy.

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Despite those marque wins, overall enterprise adoption has been sluggish, and a round of price cuts of up to 20 percent in March--perhaps in response to Google's aggressive pricing for the cloud-based Google Apps service--has so far failed to make much of an impact.

Anecdotal evidence suggests that not surprisingly Office 365 is faring best in the small office / home office (SOHO) market. Yet despite the big names that have adopted the service, Microsoft has found the enterprise market a far harder nut to crack. "Microsoft is certainly not happy with the speed that Office 365 is being taken up in the enterprise--it has fallen short of the company's expectations for the service," says Hans Koehler-Kruener, a research director at Gartner.